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Frequently Asked Questions (FAQ) - Third parties providing in-kind contributions
The beneficiary will reimburse the actual direct costs. Concerning the reimbursement of the indirect cost two different cases my apply: either not taken into account if the in-kind contribution is used in the premises of the beneficiary or taken into account by using the 25% flat-rate if the in-kind contributions are used in the third party’s premises. In this case, the direct costs actually incurred by the third party may be increased by a flat-rate of 25% on those costs. For more details and examples see annotated Grant Agreement Article 11.
Advantage: no legal link is necessary so also third parties with no legal link are able to provide in-kind contributions
Disadvantage: the third parties are not able to do project work on themselves whereas linked third parties are able to do some project work
By definition, a third party providing in-kind contributions does not perform any work in the project, so it does not play an active role in the project. Even if it seconds personnel to a beneficiary, this personnel works under the instructions of the beneficiary and not of the third party. In contrast, a Linked Third Party actively carries out work in the project.
The beneficiaries may declare their costs for paying the in-kind contribution (e.g. the invoice from the third party), but only up to the costs actually incurred by the third party. If an audit shows that the costs declared by the beneficiary are higher than those actually incurred by the third party, the difference will be rejected as ineligible (even if they correspond to the amount actually paid by the beneficiary).
A selection procedure regarding in-kind contributions by third parties is not required by the Grant Agreement. However, every beneficiary must respect its usual practise (i.e. its internal rules) and comply with the national public procurement law, if applicable.
Regarding your question about existing laws, we are not quite sure what you mean.
If the in-kind contribution is declared as a cost, it needs to be supported by evidence. Therefor, personnel provided as an in-kind contribution free of charge need to be supported by time records or a declaration on exclusive work on the action.
For information on tax regulations in a specific country, please contact your internal support facilities or tax consultant.
The estimated budget (Annex 2) may be adjusted by transfers of amounts between beneficiaries or between budget categories (or both) as long as the project is implemented as described in Annex 1.
A receipt does not necessarily lead to a reduction of the grant, but only if the receipt would produce a profit at the level of the consortium. Please see article 5.3 of the Grant Agreement for further information.
‘Financial support for third parties’ is an option which is not applicable in most grants; it has nothing to do with ‘in-kind contributions provided by third parties’.
If the in-kind contribution is free of charge (or, as you write, ’without payment’), the university does NOT receive a payment for seconding the PhD candidate. If the university charges the beneficiary for providing the PhD candidate, this is considered an ‘in-kind-contribution against payment’. The beneficiary charges the costs it incurs under the category A.3 (costs of personnel seconded by a third party against payment) and reimburses the university.
No, they are not considered as in-kind contributions. If the experts are paid a fee, the relationship would usually be considered a contract or subcontract.
In-kind contributions by third parties are only considered receipts if they have been provided by the third party free of charge and specifically to be used for the action, and declared as an eligible cost by the beneficiary. Since the beneficiary receives both a free-of-charge service (by the third party) and a financial reimbursement for the costs borne by the third party, these in-kind-contributions are likely to produce a profit.